Hestor Company’s records indicate the following information:
|
Merchandise inventory, |
|
|
1 Jan 07 |
$550,000 |
|
Purchases, January 1 through |
|
|
31 Dec 07 |
2,250,000 |
|
Sales, January 1 through |
|
|
31 Dec 07 |
3,000,000 |
On December 31, 2007 a physical inventory determined that ending inventory of $600,000 was in the warehouse. Hestors gross profit on sales has remained constant at 30%. Hestor suspects some of the inventory may have been taken by some new employees. At December 31, 2007 what is the estimated cost of missing inventory?
a. $100,000
b. $200,000.
c. $300,000
d. $700,000